Jamaica National drops compulsory savings to help mortgage holders

Due to recent increases in the company's mortgage rates, Jamaica National Building Society (JNBS) has removed the compulsory saving component from their mortgage loans. JNBS mortgage and operations executive Wanica Purkiss said the decision to eliminate compulsory savings was taken in order to soften the effect that the recent adjustments in mortgage rates would likely have on clients.

The compulsory saving component of the monthly mortgage payment was instituted by JNBS to help mortgage holders set aside funds for future repairs to their properties. Mortgagor holders could only access these funds after a predetermined time had passed and estimates or bills for home repairs would have to be presented.

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Change in BOJ liquidity requirements drives up lending rates

An increase in the BOJ liquidity requirements has caused Jamaica's leading banks (NCB, Scotiabank, First Caribbean, First Global) to increase lending rates by as much as 2.5 percentage points. In combination with the effects of the sliding dollar, businesses say this move has created an increasingly difficult operating environment in which credit is not only hard to find, but those who are able to qualify for loans face much harsher terms.

The NHT has said that there is no cause for concern, however with this latest increase in rates, along with a general cost of living increase due to local currency depreciation, we are not sure how mortgage holders will respond. America is reeling from their sub-prime mortgage crash which was driven largely by payment defaults due to rate increases on adjustable rate mortgages. We had our own financial sector fallout in the 1990's. Are we going to see another Finsac soon?

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Increase in interest in local real estate by Jamaicans overseas

Several thousand Jamaican nationals living in the United Kingdom attended the recent JNBS real estate fair. Earl Jarrett, General Manager of the Jamaica National Building Society says this is refelective of the increase that they have seen in recent times in the interest of Jamaicans in the Diaspora who want to purchase property in Jamaica. We feel that this interest may help to buoy the market which may see a levelling off of demand very shortly.

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